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Fidelity undercuts Hargreaves with new pricing structure

Fidelity has revealed its new charging structure for its direct platform which undercuts Hargreaves Lansdown by 10 basis points.

The new charges will be introduced next month and will see Fidelity charge 35bps for assets up to £250,000 and 20bps for assets above £250,000. There will be no charge for assets over £1m.

In an online press briefing, Fidelity accused competitors of launching overly complex pricing models. It says its new charges will have no additional fees beyond its standard service charge.

It means paper statements, joining, phone dealing and other event-driven charges will not apply to Fidelity’s direct clients.

It says that its ‘Select’ list of funds will have an average annual management charge of 64bps with the cheapest tracker fund priced at 9bps and the cheapest actively managed fund at 20bps.

Fidelity head of personal investing Mark Till says: “We do not believe an investor will be able to build a balanced portfolio for less.”

Fidelity will also offer to pay customers’ exit charges if they are joining from a rival platform.

Hargreaves last week announced a 45bps charge for investment up to £250,000.

The Platforum managing director Holly Mackay says: “Fidelity has come out with possibly the simplest and clearest structure in the market. This sounds to us as though the most senior people across the pond have issued a clear intent – to make Fidelity as big a consumer brand here as it is in the States. 

”Customers looking for a home for their investments should consider that this fee – although apparently a little higher than some others – includes all Sipp charges and all transactions, and Fidelity does not charge exit fees. We see this as a clear and bold move, chucking down the gauntlet to those with more complex structures. Today is the day they announce they’ve had enough of playing second fiddle in the UK market.”

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